On 29 October 2020, the European Commission published a consultation on the first impact assessment of the regulation setting CO2 emission standards for cars and vans. The purpose of the consultation is to gather views, opinions and preferences on the range of issues and the options for shaping CO2 emission standards from relevant governmental and nongovernmental actors from politics, administration, research, industry and interest groups.
The preliminary impact assessment concludes that, although CO2 vehicle standards have proven to be an effective policy instrument, without further political intervention, road transport emissions are not expected to decrease as much as they could in the past, so that the new 2030 target and the climate neutrality target for 2050 can be achieved. Achieving precisely these goals will require a greater use of zero-emission vehicles than currently projected. The current policy is not fully in line with the new climate targets and therefore does not provide a sufficiently long-term signal to channel the necessary investments in zero-emission vehicles and increase their market acceptance over time.
As a result, the innovative developments of the EU industry in the field of zero-emission technologies could progress more slowly than possible and compared to its international competitors, thereby jeopardizing the technological leadership and competitiveness of the EU automotive value chain. The production of more zero-emission models and their increased availability on the market is also the key to making zero-emission mobility more affordable and ensuring a fair transition.
The impact assessment sees a market failure and obstacle in particular in the fact that the costs of CO2 emissions to society are external costs that are not directly perceived by vehicle manufacturers and buyers and are therefore not necessarily taken into account in their production and purchasing decisions. Furthermore, experience shows that both manufacturers and end users tend to underestimate future fuel/energy savings. Consequently, it may not seem attractive for manufacturers to accelerate R&D and increase production output of more efficient vehicles, such as zero-emission vehicles, and for end-users to pay more for them. This also carries the risk that consumers will miss out on fuel/energy savings. Other market barriers are the cost and model availability of zero-emission vehicles and the availability and accessibility of the necessary charging/refilling infrastructure.
The impact assessment will examine a wide range of options on different elements of the CO2 emission standards regulation, including the degree of stringency of the CO2 emission targets for cars and vans, including options for setting new stricter targets and their timing; the specific mechanism to provide incentives and give preference to zero-emission and low-emission vehicles, including the type of mechanism and its elements and the type of vehicles to be targeted; the appropriateness of a new mechanism for taking into account the potential contribution of renewable and low-carbon fuels in determining whether manufacturers meet their targets, including the option of a voluntary crediting mechanism and in relation to other EU policies and measures for decarbonising fuels; the possibility of allocating potential revenues from fines to a specific fund or programme.
A preliminary assessment of the expected impacts includes both possible negative but also positive economic and social impacts: rising costs for producers and consumers; new jobs in new industries and business sectors; increased global competitiveness of the EU; better climate protection, etc.
According to the Commission, the impact assessment for this initiative should build on the results of the impact assessment carried out in connection with the Communication on Reinforcing Europe's climate change objectives for 2030. The impact assessment will assess the economic, social and environmental impacts, including the corona pandemic and the postpandemic phase. The consultation runs until 26 November 2020.
Related link: Public consultation of the European Commission.